Tax would ease, not solve, funding shortfall

CELINA - An additional countywide $5 vehicle registration permissive tax would not solve the problem of insufficient road and bridge funding but would be a positive step, Mercer County Engineer Jim Wiechart said.

All the extra revenue generated would stay in Mercer County and be spent mostly on hot mix, allowing for the resurfacing of 3 to 4 more miles of county roads each year, Wiechart pointed out.

County officials on Thursday afternoon held the first of two state-mandated public hearings to give citizens the chance to respond before commissioners decide upon the additional $5 permissive tax.

Only a handful of county officials and a former county official attended the hearing. The second hearing is set for 3 p.m. March 5 in the first-floor conference room of the Mercer County Central Services Building, 220 W. Livingston St., Celina.

The county already has two such permissive taxes - levied to help pay for road and bridge-related work - on the books, costing operators $10 per year. The permissive taxes are added to the state fees when vehicles are registered annually.

Now, officials are looking to establish a third county permissive tax to help offset rising material and construction costs. All county operators of motor vehicles used on public roads or highways would pay at least $15 annually in local vehicle registration permissive taxes if commissioners adopt the additional $5 tax.

State motor vehicle revenue, in addition to permissive taxes and fuel excise taxes, together generated $5.41 million for Mercer County in 2018. The new fee would generate about $255,000 each year.

"A $5 permissive tax is not indexed to inflation in any way so it does not grow in cost beyond the original intent of its creation," Wiechart said.

Wiechart opened the hearing by stressing two key facts he said are not known by many residents.

"The roads and bridges on township and county roads are not funded by property or sales tax," he said. "Secondly, the county general fund does not pay for road improvements."

Rather, infrastructure work is funded through road user fees in the form of gas taxes and license registration fees, Wiechart said. The two sources do not have built-in automatic inflationary adjustment, leading to stagnant funding.

"When you go to the pump to get gas there's no price fluctuation to adjust with the inflation," he said.

Also, operators of electric and hybrid vehicles pay little to no gas tax, Wiechart noted. However, nearly all vehicle operators pay registration permissive taxes.

"So this is not a revenue collection that takes from one group to hand to another, but involves nearly everyone for the benefit of everyone in every part of Mercer County," Wiechart said.

The cost of chip and seal - the engineering office's primary and most cost-effective maintenance tool - has jumped 20 percent over nine years for an average annual increase of 2.2 percent, while the cost of hot mix has jumped 54.3 percent over nine years for an average annual increase of 6 percent per year, Wiechart said.

Revenue, however, has remained stagnant. Wiechart said his office has done as much as possible to limit expenses.

"Because of cost controls and efficiency improvements through our office, our labor and fringe benefits cost over the last nine years have only increased 1.13 percent, an average increase of 0.125 percent per year as budgeted," he said.

Local operators also are subject to other municipal and township permissive taxes. The local permissive tax rate varies from $10 to $20, depending upon the town or township in which a person lives.

"The enactments of this permissive tax does not hinder the ability of municipalities and townships to enact their own permissive (tax)," Wiechart said. "Some of these entities in this county have already done this in the past."

Wiechart's office is responsible for maintaining 385 miles of county roads and 381 bridges on township and county roads.